April 28, 2021 | AtoZ Markets – According to public court documents, US federal agents arrested Russian and Swedish citizen Roman Sterlingov on three charges related to his alleged involvement in the Bitcoin Fog mixing service.
Sterling is accused of conducting unlicensed money transfers, money laundering, and running an unlicensed money transfer service.
Bitcoin Fog allows its customers to transfer bitcoin to each other while obfuscating where the coins are being sent from, according to an affidavit filed by IRS Criminal Investigation Special Agent Devon Beckett.
The service was launched in 2011 and was allegedly used to transfer about 1.2 million BTC - approximately $335.8 million, based on the value of the cryptoasset at the time of transactions.
The prosecutor's office suggests that BTC from the darknet markets Silk Road, Evolution, AlphaBay, Agora and Silk Road 2.0, as well as BTC stolen from cryptocurrency exchanges, passed through the service.
Bitcoin Fog has not been registered with the Financial Crimes Enforcement Network (FinCEN) as a money transfer company and is not licensed to operate in Washington.
Federal agents used blockchain analysis tools to determine the amount of bitcoins that passed through the service, as well as some sources of BTC.
“While the identity of the owner of a Bitcoin address is generally anonymous, law enforcement can often identify the owner of a specific address by analyzing the blockchain,” Beckett said.
An IRS agent conducted a transaction on Bitcoin Fog and verified that it is a BTC mixing service. According to Beckett, the second transaction was related to the sale of drugs and was also sent through the service.
“Analysis of Bitcoin transactions, financial statements, ISP records, email data and additional research information identifies Roman Sterlingov as the primary operator of Bitcoin Fog,” Beckett said.
Investigators also linked Sterling to the Bitcoin Fog domain through a payment made to Liberty Reserve. Law enforcers identified Sterling's MtGox accounts, which the defendant was accessing from the same IP addresses that were used for the Liberty Reserve account.
Recall that in March, six residents of New Hampshire were arrested on charges of organizing an unlicensed cryptocurrency exchange, fraud and money laundering.
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